Chapter 8 - Consideration of internal control in an IT environment. In this chapter, the learning objectives are: Contrast the characteristics of an information technology-based system with those of a less sophisticated system, describe the nature of various types of information technology-based systems, describe the appropriate organizational structure in an information technology environment,. | Consideration of Internal Control in an IT Environment Chapter 8 1 Computer Hardware Input/Output Devices Central Processing Unit Auxiliary Storage Card Readers Arithmetic Unit Magnetic Disks Terminals Control Unit Magnetic Drums Electronic Cash Primary Storage Magnetic Tapes Registers Optical Compact Optical Scanners Disks Magnetic Tape Drives Magnetic Disk Drives Optical Compact Disks 8- 2 2 Types of Systems Stand-alone accounting systems Integrated enterprise wide systems (., SAP) 8- System Characteristics Batch processing On-line capabilities Database storage Computer networks End user computing 8- 3 8- IT Control Activities General Control Activities Developing new programs and systems Changing existing programs and systems Access to programs and data Computer operations Application Control Activities Programmed application control activities Manual application control activities User Control Activities Manual testing of output Reconciliations to input . | Consideration of Internal Control in an IT Environment Chapter 8 1 Computer Hardware Input/Output Devices Central Processing Unit Auxiliary Storage Card Readers Arithmetic Unit Magnetic Disks Terminals Control Unit Magnetic Drums Electronic Cash Primary Storage Magnetic Tapes Registers Optical Compact Optical Scanners Disks Magnetic Tape Drives Magnetic Disk Drives Optical Compact Disks 8- 2 2 Types of Systems Stand-alone accounting systems Integrated enterprise wide systems (., SAP) 8- System Characteristics Batch processing On-line capabilities Database storage Computer networks End user computing 8- 3 8- IT Control Activities General Control Activities Developing new programs and systems Changing existing programs and systems Access to programs and data Computer operations Application Control Activities Programmed application control activities Manual application control activities User Control Activities Manual testing of output Reconciliations to input documents 8- 4 3 8- Programmed Control Activities Input validation checks Limit test Validity test Self-checking number Batch controls Item count Control total Hash total Processing controls 8- 5 Techniques for Testing Application Controls Auditing Around the Computer--Manually processing selected transactions and comparing results to computer output Manual Tests of Computer Controls--Inspection of computer control reports and evidence of manual follow-up on exceptions Auditing Through the Computer--Computer assisted techniques Test Decks Integrated Test Facility Controlled Programs Program Analysis Techniques Tagging and Tracing Transactions Parallel Simulation 8- 6 4
